The client, a chemical manufacturing company was into manufacturing of dyestuff intermediates. The company was making losses since 1998 due to:
- High amount of volatility in the demand-supply scenario
- Lower product margins
- Competition from the Chinese players
The top management requested UC Strategy to conduct a feasibility study for the company and evaluate exit options for the business.
To undertake the assessment of the client exiting the business, UC Strategy adopted the following approach:
- Conducted analysis of the global market on dye intermediates
- Undertook primary and secondary research to landscape the industry, market growth rate, competitiveness of Indian players vis-à-vis Chinese players
- Studied the market attractiveness for Indian players in the domestic and global markets
- Analysed the competitive position of the client with respect to the domestic and Chinese competition in the present scenario
- Evaluated new intermediates that can be profitably commercialised with the existing manufacturing set-up
- Evaluated strategic options for the client, based on various criteria like marketing risk, product risk, customer risk, investment risk, knowledge risk and people risk
- Recommended to sell the business based on the defined criteria and finalised the roadmap for the exit option for the business
The clients top Management implemented the roadmap and sold the business at an acceptable business consideration.